Air New Zealand posts record interim profit

According to Luxon, Air New Zealand brings 40 percent of those tourists to the country.

While Air New Zealand added 16 percent extra capacity into the market in the first half, demand due to tourism growth increased 17 percent.

Lower fuel prices boosted pretax earnings by NZ$184 million, Air New Zealand said.

“We are delighted to start off 2016 with such a stellar performance”, said chairman Tony Carter.

It’s increased its interim dividend by 54 percent to 10 cents a share.

· Earnings before taxation of $457 million, up 132%.

On the trans-Tasman route Luxon said demand was up 6 percent during the half while Air New Zealand’s traffic from Australia was up 6.7 percent as well.

Net profit in the first half rose 154 per cent to $NZ338m.

Falling fuel prices has been a major driver of results for airlines around the world and Air New Zealand is no exception.

Aviation commentator Irene King said Air New Zealand’s load factors were at such a level that suggested its pricing was competitive.

Luxon said Jetstar launched regional services to Nelson and Napier in December adding New Plymouth and Palmerston North services in February but it had not impacted Air New Zealand as much as expected.

Air New Zealand says competition won’t hinder its growth, and is expecting it’s full year before tax earnings to exceed $800 million dollars. Even though it did 16 per cent more flying during the last six months it used only 12 per cent more fuel – the promised savings from new planes are materialising. “It is no surprise we are the best airline in Australasia on a relative basis”.

Air New Zealand’s 25.9% investment in Virgin Australia contributed $NZ15 million during the first half. 5 million pretax profit.

The airline has forecast capacity growth of 7 per cent across its network in the second half, driven by the domestic, American and Asian markets.

The airline has ridden the biggest tourism surge in years with visitors flocking in from China, the United States, Britain, Europe and Australia driving passenger revenue up $315 million (or 16 per cent) to $2.3 billion.

Air New Zealand had put a “relentless focus” on costs and inefficiencies to ensure it did not pass those onto customers, he said.